Art Gallery of NSW expansion to go ahead

A controversial $344 million expansion of the Art Gallery of NSW has been given the go-ahead by the state government.

Construction of the new building, which will double the exhibition space of the existing gallery and link it to Sydney's Royal Botanic Gardens, will begin in early 2019 and is expected to be completed in time for the gallery's 150th anniversary in 2021.

The plans for the "Sydney Modern" project were first unveiled in 2013 and were later slammed by former prime minister Paul Keating as a "megaplex" and a "land grab" masquerading as a gallery.

Gallery director Michael Brand says the expansion, designed by Pritzker Prize-winning architects from Japanese firm SANAA, will provide new indoor and outdoor spaces to show more art to more art lovers.

"From our stunning parkland setting overlooking Sydney Harbour, in one of the most beautiful cultural precincts in the world, our transformed institution will represent Sydney's bold spirit as a leading 21st-century art museum with a deep commitment to both Australian and international art," Dr Brand said.

The NSW government last year pledged $244 million for the expansion, with another $100 million coming from private donors.

The new building will sit to the north of the existing gallery and include a decommissioned WWII naval oil tank that will be transformed into a 2,200sqm contemporary underground art space.